Grundel v. Bank of Craig, No. KCD
Court | Missouri Court of Appeals |
Writing for the Court | PRITCHARD |
Citation | 515 S.W.2d 177 |
Parties | Russell GRUNDEL, Sr., and Russell Grundel, Jr., Respondents, v. BANK OF CRAIG, a corporation, Appellant. 26427. |
Docket Number | No. KCD |
Decision Date | 07 October 1974 |
Page 177
v.
BANK OF CRAIG, a corporation, Appellant.
Motion for Rehearing and/or Transfer Denied Nov. 4, 1974.
Rupert Usrey, Oregon (Eiser & Usrey, Oregon, of counsel), for appellant.
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Bernard W. Gorman, Tarkio, for respondents.
Before PRITCHARD, P.J., and WASSERSTROM and SOMERVILLE, JJ.
PRITCHARD, Presiding Judge.
Appellant Bank undisputedly imposed this condition upon respondents: That it would be necessary, in order for the Bank to continue to extend credit, that a loan in the amount of $5,000.00 would have to be made to him at 8% interest, and that the proceeds of the loan would have to be deposited by him in a non-interest bearing certificate of deposit with the Bank. The Bank states in its brief that it does not contend that this transaction was proper, and concedes that the respondents 'are entitled to a refund of the interest paid on this $5,000.00 note.'
The evidence tends to show and the court found that the above condition was imposed in January, 1969. A $5,000.00 note dated July 25, 1969, was in evidence, but Russell Grundel, Jr., testified that it was a renewal of the original note for the same amount executed on January 25, 1969. The court found that during the course of dealings of respondents and the Bank after January 25, 1969, to May 21, 1971, a total of $3,125.76 interest was paid by respondents; and that they were entitled to recover twice the amount paid, or $6,251.52, under the usury statute, § 362.380(1), RSMo 1969, V.A.M.S. The principal issue is, then, whether the interest exacted by reason of the execution of the January, 1969, $5,000.00 note, and the retention by the Bank of its proceeds on a non-interest bearing certificate of deposit, can be applied only to it; or whether the excessive interest exacted extends to and taints with usury all subsequent borrowings of respondents.
The Bank contends that since, after some colloquy, the court found that $40,000.00 was borrowed by respondents, and, therefore, $3,125.76 interest on that amount at 8% per annum could not be usurious. It is of no consequence that the court found $40,000.00 to have been borrowed. By independent computation of the interest received by the Bank from January 25, 1969, to the time respondent ceased doing business with it, at 8% per annum (as all notes provide), the amount received was within about $15.00 of a total of 8% on all loans for the time each loan was outstanding. It follows that if the $645.56 interest received on the $5,000.00 note applies to subsequent borrowings over about 14 months time, the amounts of interest received exceeded the legal rate.
The rule is stated in 45 Am.Jur.2d, Interest and Usury, § 113, p. 100: 'If as a condition of making a loan the borrower is required to leave part of the money on deposit with the lender, the transaction is usurious if the interest paid for the loan amounts to more than legal interest on the sum actually available for the use of the borrower.' Annotation 14 A.L.R. 1422, 1423(II); see also 91 C.J.S. Usury § 35c., p. 615. In this case there is no question that the $5,000.00 proceeds placed on certificate of deposit was not ever available to respondent. Indeed the evidence shows that the Bank retained the certificate, and that when respondents desired to pay off their final indebtedness, it could not be found and the Bank demanded a bond from them. The certificate was later found by the Bank and respondents were able to close their dealings with it.
In Federal Mortgage Co. v. State Nat. Bank, 254 S.W. 1002 (Tex.Civ.App.1923), the cross-appellants McElvany owned certain lands with liens upon it, including one of H. P. Drought, Trustee. Federal Mortgage sought to take over the Drought lien but was unable to do so, and complained to the McElvanys that they were forced to hold a second lien which was forbidden by its charter. It was arranged that a $19,000.00 loan would be made, $15,000.00 of which would be paid Federal Mortgage for the balance of the McElvany loan and $4,000.00 would be paid to general
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agents and officers of the two companies as brokerage fees for trouble in handling the transaction and for consummating it. The McElvanys pleaded that the $4,000.00...To continue reading
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American Timber & Trading Co. v. First Nat. Bank of Oregon, Nos. 80-3230
...rate of interest. McAdoo, 535 F.2d at 1053 (refusing to disturb the jury's finding of no intent); see also Grundel v. Bank of Craig, 515 S.W.2d 177 (Mo.App.1974) (effective interest rate increased when amount of compensating balance never available to the borrowers); Page 788 Miller v. Firs......
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Stickler's Estate, Matter of, No. 10198
...personal representative, they having waived that right by failing to raise the question in the trial court. Grundel v. Bank of Craig, 515 S.W.2d 177, 180(4) (Mo.App.1974); S v. W , 514 S.W.2d 848, 855(15) (Mo.App.1974); Lamb v. N. Y. Life Ins. Co., 377 S.W.2d 148, 150(4) (Mo.App.1964); Bart......
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Garrett v. Citizens Sav. Ass'n, No. 32170
...court was correct in finding that the $9,532.07 exacted as interest on the escrowed money was usurious. See Grundel v. Bank of Craig, 515 S.W.2d 177 (Mo.App.1974); see generally 92 A.L.R.3d 769, 775. The trial court's conclusions of law made no mention, however, of the $1,750.00 service cha......
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Brotherton v. Kissinger, No. 10003
...income tax return is not sufficient Page 908 alone to prove or disprove the existence of a partnership. Grundel v. Bank of Craig, 515 S.W.2d 177, 180 (Mo.App.1974); Bates v. Morris, supra, 467 S.W.2d at 290(6). Unlike statutory and judicial definitions, the tax definition of "partnersh......
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American Timber & Trading Co. v. First Nat. Bank of Oregon, Nos. 80-3230
...rate of interest. McAdoo, 535 F.2d at 1053 (refusing to disturb the jury's finding of no intent); see also Grundel v. Bank of Craig, 515 S.W.2d 177 (Mo.App.1974) (effective interest rate increased when amount of compensating balance never available to the borrowers); Page 788 Miller v. Firs......
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Stickler's Estate, Matter of, No. 10198
...personal representative, they having waived that right by failing to raise the question in the trial court. Grundel v. Bank of Craig, 515 S.W.2d 177, 180(4) (Mo.App.1974); S v. W , 514 S.W.2d 848, 855(15) (Mo.App.1974); Lamb v. N. Y. Life Ins. Co., 377 S.W.2d 148, 150(4) (Mo.App.1964); Bart......
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Garrett v. Citizens Sav. Ass'n, No. 32170
...court was correct in finding that the $9,532.07 exacted as interest on the escrowed money was usurious. See Grundel v. Bank of Craig, 515 S.W.2d 177 (Mo.App.1974); see generally 92 A.L.R.3d 769, 775. The trial court's conclusions of law made no mention, however, of the $1,750.00 service cha......
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Brotherton v. Kissinger, No. 10003
...income tax return is not sufficient Page 908 alone to prove or disprove the existence of a partnership. Grundel v. Bank of Craig, 515 S.W.2d 177, 180 (Mo.App.1974); Bates v. Morris, supra, 467 S.W.2d at 290(6). Unlike statutory and judicial definitions, the tax definition of "partnership" i......